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DESCRIPTION OF BUSINESS
3 Months Ended
Mar. 31, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
DESCRIPTION OF BUSINESS DESCRIPTION OF BUSINESS
 
General

Summit Hotel Properties, Inc. (the “Company”) is a self-managed hotel investment company that was organized on June 30, 2010 as a Maryland corporation. The Company holds both general and limited partnership interests in Summit Hotel OP, LP (the “Operating Partnership”), a Delaware limited partnership also organized on June 30, 2010. Unless the context otherwise requires, “we,” “us,” and “our” refer to the Company and its consolidated subsidiaries.
 
We focus on owning premium-branded hotel properties with efficient operating models primarily in the Upscale segment of the lodging industry. At March 31, 2022, our portfolio consisted of 101 hotel properties with a total of 15,228 guestrooms located in 24 states. As of March 31, 2022, we own 100% of the outstanding equity interests in 61 of our 101 hotel properties. We own a 51% controlling interest in 40 hotel properties through a joint venture. Our joint venture was formed in July 2019 with GIC (the “Joint Venture”), Singapore’s sovereign wealth fund, to acquire assets that align with our current investment strategy and criteria. We serve as general partner and asset manager of the Joint Venture and we generally invest 51% of the equity capitalization of the limited partnership, with GIC investing the remaining 49%. The Joint Venture typically finances assets with a 50% overall leverage target.

We have elected to be taxed as a real estate investment trust (“REIT”) for federal income tax purposes. To qualify as a REIT, we cannot operate or manage our hotel properties. Accordingly, all of our hotel properties are leased to our taxable REIT subsidiaries (“TRS Lessees”).

During the quarter ended March 31, 2022, the Operating Partnership and the Joint Venture closed on a transaction with NewcrestImage Holdings, LLC, a Delaware limited liability company, and NewcrestImage Holdings II, LLC, a Delaware limited liability company (together, “NewcrestImage”), to purchase from NewcrestImage a portfolio of 27 hotel properties, containing an aggregate of 3,709 guestrooms, and two parking structures, containing 1,002 spaces (such hotel properties and parking structures, the “Portfolio”), and various financial incentives for an aggregate purchase price of $822.0 million (the "NCI Transaction"). See "Note 3 - Investment in Hotel Properties, net - Acquisition of NewcrestImage Portfolio" for further information.

Risks and Uncertainties
 
The Company is subject to risks and uncertainties as a result of the effects of the novel coronavirus, designated as COVID-19 (“COVID-19”) and its variants, for at least the near future. The pandemic has had a significant negative effect on the U.S. and global economies, including a rapid and sharp decline in all forms of travel, both domestic and international, and a significant decline in hotel demand. These conditions resulted in a substantial decline in our revenues, profitability and cash flows from operations beginning in March, 2020.

Beginning in March 2020, the Company took several actions to reduce costs and increase liquidity to mitigate the effects of the COVID-19 pandemic on the Company. We continue to engage in certain steps to reduce costs while taking appropriate actions to maintain guest safety and satisfaction. For additional information concerning such actions taken in response to the effects of the COVID-19 pandemic on our business, please see our Annual Report on Form 10-K for the year ended December 31, 2021.

During the three months ended March 31, 2022, we continued to experience significant improvement in our business compared to earlier in the Pandemic, driven primarily by leisure travel and to a lesser extent modest improvement in other demand segments, including corporate and group. The improvement was the result of a significant increase in the availability and administration of vaccines globally as well as the easing of government restrictions and guidance in most jurisdictions. We anticipate that continued improvement in operating trends will be dependent on continued strength in leisure travel and a recovery of business travel. More broadly, a return to normalized levels of operations is dependent upon a continuation in the recovery of our business, further dissipation of concerns related to the Pandemic, geopolitical stability, moderating inflation and maintaining a high-quality portfolio aligned with evolving guest preferences.